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Is Hawaiian (HA) A Good Stock To Buy?

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Abigail Fisher
·6 min read
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A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Hawaiian Holdings, Inc. (NASDAQ:HA).

Is HA a good stock to buy now? Hawaiian Holdings, Inc. (NASDAQ:HA) was in 9 hedge funds' portfolios at the end of September. The all time high for this statistics is 25. HA investors should be aware of a decrease in hedge fund sentiment in recent months. There were 12 hedge funds in our database with HA positions at the end of the second quarter. Our calculations also showed that HA isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

According to most shareholders, hedge funds are perceived as slow, outdated investment vehicles of yesteryear. While there are over 8000 funds in operation at the moment, Our experts hone in on the moguls of this group, approximately 850 funds. Most estimates calculate that this group of people oversee the majority of the smart money's total capital, and by tailing their finest investments, Insider Monkey has brought to light numerous investment strategies that have historically outstripped the S&P 500 index. Insider Monkey's flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .

Martin Whitman Third Avenue Management Marty Whitman
Martin Whitman Third Avenue Management Marty Whitman

Martin Whitman of Third Avenue Management

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now we're going to take a peek at the key hedge fund action encompassing Hawaiian Holdings, Inc. (NASDAQ:HA).

Do Hedge Funds Think HA Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -25% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards HA over the last 21 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Martin Whitman's Third Avenue Management has the biggest position in Hawaiian Holdings, Inc. (NASDAQ:HA), worth close to $15 million, accounting for 2.1% of its total 13F portfolio. Sitting at the No. 2 spot is Thomas E. Claugus of GMT Capital, with a $4.7 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Other professional money managers that are bullish comprise Ken Griffin's Citadel Investment Group, Israel Englander's Millennium Management and Lawrence Kam's Sonic Capital. In terms of the portfolio weights assigned to each position Third Avenue Management allocated the biggest weight to Hawaiian Holdings, Inc. (NASDAQ:HA), around 2.08% of its 13F portfolio. Sonic Capital is also relatively very bullish on the stock, setting aside 1.81 percent of its 13F equity portfolio to HA.

Because Hawaiian Holdings, Inc. (NASDAQ:HA) has faced falling interest from the smart money, it's easy to see that there was a specific group of funds that decided to sell off their entire stakes last quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital sold off the biggest investment of all the hedgies tracked by Insider Monkey, valued at an estimated $5.2 million in stock, and Renaissance Technologies was right behind this move, as the fund cut about $2.6 million worth. These transactions are important to note, as total hedge fund interest dropped by 3 funds last quarter.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Hawaiian Holdings, Inc. (NASDAQ:HA) but similarly valued. We will take a look at Golar LNG Limited (NASDAQ:GLNG), Seacor Holdings, Inc. (NYSE:CKH), Republic Bancorp, Inc. (NASDAQ:RBCAA), Groupon Inc (NASDAQ:GRPN), SpartanNash Company (NASDAQ:SPTN), Ambac Financial Group, Inc. (NYSE:AMBC), and HomeStreet Inc (NASDAQ:HMST). All of these stocks' market caps match HA's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GLNG,22,151248,5 CKH,10,86903,2 RBCAA,4,5485,-1 GRPN,16,136870,-3 SPTN,12,41184,-3 AMBC,15,61070,-1 HMST,11,34030,-2 Average,12.9,73827,-0.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 12.9 hedge funds with bullish positions and the average amount invested in these stocks was $74 million. That figure was $29 million in HA's case. Golar LNG Limited (NASDAQ:GLNG) is the most popular stock in this table. On the other hand Republic Bancorp, Inc.(NASDAQ:RBCAA) is the least popular one with only 4 bullish hedge fund positions. Hawaiian Holdings, Inc. (NASDAQ:HA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for HA is 26.7. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on HA as the stock returned 55% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.

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